Agnico Eagle (AEM) To Post Q4 Earnings: Is A Beat In Store?

Agnico Eagle Mines Limited (NYSE:AEM) is scheduled to report fourth-quarter 2019 results on Feb 13, after the closing bell.

Agnico Eagle has trailing four-quarter positive earnings surprise history of 245.9%, on an average. The benefits of higher production and increased gold prices on a year-over-year basis are likely to get reflected in Agnico Eagle’s fourth-quarter performance.

The stock has rallied 40.9% in the past year compared with the industry’s 37.1% surge.

Let’s see how things are shaping up for the upcoming announcement.

What the Zacks Model Says

Our proven model predicts an earnings beat for Agnico Eagle this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earning beat. That is the case here, as you will see below:

Earnings ESP: Agnico Eagle has an Earnings ESP of +0.47%. The Most Accurate Estimate and the Zacks Consensus Estimate are currently pegged at 36 cents and 35 cents, respectively. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Agnico Eagle currently carries a Zacks Rank #3.

What to Expect

The Zacks Consensus Estimate for Agnico Eagle’s fourth-quarter gold production is currently pegged at 485,000 ounces, which suggests a sequential rise of 1.7%.

In October 2019, the company revised its production guidance for 2019. Gold production for 2019 is projected in the band of 1.77-1.78 million ounces compared with 1.75 million ounces projected earlier. Notably, the projection includes pre-commercial production from Meliadine and Amaruq.

Agnico Eagle’s fourth-quarter performance is likely to have benefited from higher production at Meliadine. The company is ramping production at Meliadine. In third-quarter 2019, the company realized its first full-quarterly commercial production at Meliadine. The mine produced 3,300 tons per day through the middle of October 2019. The company expects mining rates in the range of 3,600-3,700 tons per day at Meliadine for the fourth quarter.

The Amaruq satellite deposit at the Meadowbank Complex has achieved commercial production on Sep 30, 2019. Operations are continuing to ramp up at the site and production at the Meadowbank Complex for 2019 is expected to be around 200,000 ounces of gold (including the pre-commercial production).

Moreover, Agnico Eagle’s production at Pinos Altos is expected to have improved in the fourth quarter. The company’s fourth-quarter performance is also expected to reflect strong production and throughput at Kittila, LaRonde Complex, Goldex and Canadian Malartic.

Other Factors at Play in Q4

Additionally, the company is expected to have benefited from higher gold prices in the fourth quarter. Uncertainties regarding the U.S.-China trade war, rate cuts by the U.S. Federal Reserve, global downturn concerns and tensions in the Middle East are some factors that have supported gold prices in 2019. As such, the benefits of higher year-over-year gold prices are expected to have been tailwinds for the company.

Other Stocks Likely to Beat Estimates

Here are other companies in the basic materials space you may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:

Bunge Limited (NYSE:BG) , slated to release fourth-quarter 2019 earnings on Feb 12, has an Earnings ESP of +18.18% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Cleveland-Cliffs Inc. (NYSE:CLF) , scheduled to release fourth-quarter 2019 earnings on Feb 20, has an Earnings ESP of +29.17% and carries a Zacks Rank #3.

AK Steel Holding Corporation (NYSE:AKS) , scheduled to release fourth-quarter 2019 earnings on Feb 20, has an Earnings ESP of +11.11% and carries a Zacks Rank #3.

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